News Story

Charter Teachers Get No Pensions, Amendment Would Make Schools Pay Anyway

A House Republican and a Senate Democrat introduced same measure, both defeated

State Rep. Martin Howrylak sought this week to require that charter schools pay into the underfunded public school pension system, something Democratic politicians and well as teachers union officials have been seeking for years. The proposal failed in a voice vote taken in the House.

The vast majority of charter school employees are not enrolled in the Michigan Public School Employees Retirement System, or MPSERS. Out of 294 charter schools in the state, just 35 have one or more employees enrolled in the state-run pension system, according to the Michigan Association of Public School Academies.

Howrylak, a Republican from Troy, offered an amendment to Senate Bill 574 on Jan. 18. The amendment would require charter schools to pay into the pension system as a condition of receiving money, known as enhancement millages, collected by intermediate school districts. It was defeated in a voice vote.

In October, Sen. Hoon-Yung Hopgood, D-Taylor, offered the same amendment when the bill was in the state Senate. The amendment was defeated 12-25.

Senate Bill 574 would allow charters, for the first time, to get a share of the revenue from this type of property tax if they are within the territory served by an Intermediate School District that levies one. Under current law, money from these taxes is distributed only to conventional school districts. The change would apply to future enhancement millages only, not to ones that have already been approved by voters.

But few charter school employees are eligible to receive a pension from the state pension system, making the amendment, in essence, a tax on charter schools. They would be contributing to a pension system from which most of their staff would get no benefit.

School districts currently contribute an annual amount equal to 37 percent of their payroll expense, meaning that for every dollar paid to employees, they must send 37 cents to the state.

“We need to continue to reform MPSERS, and this would a step in the wrong direction,” said Dan Quisenberry, president of the Michigan Association of Public School Academies. “We need to help schools be able to attract and retain quality teachers, which is the most important ingredient in student success. Most new teachers entering the workforce will never benefit from MPSERS. This amendment would do nothing but hurt student achievement.”

There were a total of 436,520 current and retired public school employees enrolled in the state-run pension system as of 2016. Of these, 207,645 are active employees, and the districts they work for are making contributions on their behalf. Another 211,007 are retired and collecting benefits.

Click here to see Rep. Howrylak's response.